Finance chief defends second home council tax levySaturday News Quiz Answers – November 15North Yorkshire to tackle housing crisis with second homes charge

North Yorkshire is set to become the one of the country’s first areas to adopt a mandatory 100% council tax premium for second homes as part of efforts to tackle the housing crisis.

The groundbreaking move, which has been approved at a full meeting of Conservative-led North Yorkshire County Council today, will see the premium introduced for council tax bills on second homes from April 2024, should Royal Assent be given to legislation to give local authorities extra powers.

The county has the highest number of second homes in the region, and concerns have been voiced that the trend is undermining the availability of housing for local communities as well as inflating property prices.

The North Yorkshire Rural Commission, which was established to look into a host of issues affecting countryside communities, last year highlighted the affordable housing crisis as among the greatest challenges to resolve.

The meeting today heard an impassioned debate in which numerous concerns were raised over whether the levy would tackle the issue and the housing crisis blamed on Conservative governments selling off council housing and not building sufficient homes to replace them.

As some opposition councillors described the levy as “far from perfect” and “a serious and credible start” to trying to resolve the lack of affordable homes in areas such as Harrogate, the North Yorkshire coast, the North York Moors and the Yorkshire Dales, leading members of the authority nodded in agreement.

The meeting was told it is hoped the premium will provide a £10m boost to finance council priorities, including to help introduce more housing in areas particularly affected by the affordability crisis.

Research has shown the Harrogate district, along with the Craven and Ryedale areas, could each provide about £1.5m in extra revenue through the premium.

‘We feel we are being penalised’

While the authority has claimed the measure is “ultimately aimed at bringing second homes back into use for local communities”, the meeting heard from second home owners in Nidderdale who told councillors the move would create financial difficulties for them.

One couple told the meeting they had converted a chapel, increasing the housing stock in the dale for future generations, but were now facing a penalty for having done so.

The residents stated: 

“We feel we are being penalised for something that is not of our making.”

Independent Cllr John McCartney said the tax premium would amount to “tinkering at the edges”, while Independent group leader Cllr Stuart Parsons said “penalising those who aspire” was the wrong way to deal with the problem.

He called on the council to buy houses and put local occupancy restrictions on them and said there were still simple loopholes for second home owners to avoid paying either council tax or business rates, so the authority looked set to “cut its own throat”.

However, Upper Dales member Councillor Yvonne Peacock said the policy was vital as many people could no longer afford to rent or buy properties in her division.

Read more:

The council’s executive member for finance, Cllr Gareth Dadd, said the premium would be levied consistently regardless of second home owners’ circumstances, so the authority could do all it could to incentivise people not to own second homes in the county.

He said there would always be exceptional cases and officers would have the ability to grant reductions if certain criteria were met.

Cllr Dadd said the overwhelming majority of second home owners would be faced with either releasing their properties into the rental market or providing funds for key council services.

Ahead of a majority of members passing the levy, he said while he did not support greater taxation, he was absolutely committed to the move which “would help local people to live and remain in the county”.

Double council tax on North Yorkshire second homes approved

Owners of second homes in North Yorkshire are set to pay a 100% premium on their council tax.

Senior councillors on North Yorkshire County Council yesterday approved the measure, which is expected to come into force within two years.

The council’s executive unanimously backed the plans, which would effectively double council tax bills for second home owners, and the proposals will now be considered at a full council meeting.

The move will see the premium introduced for homes which have been sat empty for a year or more.

Cllr Carl Les, leader of the county council, said the move would help local people access housing.

He said:

“There is no simple solution to the issue of affordable housing, second homes and the impact they have on housing for local communities.

“But we recognise that bold and decisive action needs to be taken to deal with the affordable housing crisis in North Yorkshire, and that is why the executive has decided to pursue the policy of a council tax premium.

“It may not be popular with everyone, but that is not the key factor in this decision. We need to act to try and ensure more local people have access to housing in their own communities, and the premium on council tax bills for second homes will be a significant step towards achieving that.

“Second homes and the impact they can have on the availability of housing has been a long-running problem that has affected communities not just in North Yorkshire but across the country, and this was reinforced by the findings of the independent North Yorkshire Rural Commission.”

Analysis by the county council showed the introduction of a 100% premium on council tax bills for second homes in North Yorkshire could generate in excess of £14 million a year in additional revenue.

Read more:

The research said that Richmondshire could generate about £1.8 million through the second homes premium, while the Craven, Harrogate and Ryedale districts could each provide about £1.5 million in extra revenue.

North Yorkshire County Council’s executive member for finance, Cllr Gareth Dadd, who is also the authority’s deputy leader, said: 

“We know that there is an acute shortage of housing for local people in many communities in North Yorkshire, and this has been an issue that has long affected their opportunities to actually buy their own home.

“Places such as the Yorkshire Dales and the North York Moors as well as coastal towns such as Scarborough and Whitby are without question wonderful places to live.

“But with that comes the fact that these areas also see very high numbers of second homes, which affects the availability of housing for local people.

“The scheme to introduce the council tax premium will ideally see these second homes brought back into use for local people. But if not, then there will be a valuable new revenue stream created that will help fund council priorities, such as helping introduce more housing for local communities.”

Action to tackle Yorkshire Dales second homes receives ‘overwhelming support’

Further action to tackle rising amounts of second homes and holiday lets in the Yorkshire Dales National Park looks set to become part of a plan which will shape the area until 2040.

A meeting of the Yorkshire Dales National Park Authority today will consider responses to a consultation on its Local Plan, which features policies designed to increase housing for local residents.

The proposed policies come ahead of North Yorkshire County Council’s executive considering introducing a 100% council tax premium on second and empty homes in the Dales.

The North Yorkshire Rural Commission concluded last year that the shortage of affordable housing was among the greatest challenges to resolve.

An officer’s report to the park authority meeting states the consultation has confirmed “overwhelming support” for all new housing to be for permanent residents.

Read More:

However, officers have highlighted some respondents had dubbed the measure too weak and had stated all new housing should be targeted at local need only, as permanent occupancy would still mean younger residents faced competition from retirees.

While community leaders say it is only fair people retiring from working a lifetime in the Dales, such as farmers, should be able to continue living in the area, concerns have also been raised that about 30% of national park residents are aged over 65, about double the national average.

The consultation has also found support for the authority attempting to get housing built on specific sites it has identified, as finding suitable land for housing in the national park has proved to be a major hurdle in developing affordable housing.

Views were split over whether requiring developers to provide up to 50% affordable housing on sites in certain areas of the park is achievable.

Ahead of the meeting, Upper Dales councillor and park authority member Yvonne Peacock said the current policy of restricting new housing to those with local connections often prevented “desperately needed new blood from coming in and working here”.

She said fostering the economic wellbeing of local communities was made a higher priority by the authority.

Cllr Peacock said: 

“Having a policy restricting new homes to people who permanently live in them is a better policy as many of the barns that have been converted have ended up as holiday cottages.”

National park officers said the next stage of the Local Plan would see a consultation on the possible housing sites. The target is to provide sufficient land for 850 new homes between 2023 and 2040.

Officers are currently assessing and mapping potential sites and updating housing development boundaries around 100 settlements.

A list of potential sites and maps will be issued for public comment in the next few months.

Double North Yorkshire council tax on second homes set to go ahead

Second home owners in North Yorkshire look set to be the first in the country to pay double council tax.

It comes after an investigation into avoidance loopholes concluded there is potential for the charge to be avoided.

In an attempt to help improve access to housing for local people, North Yorkshire County Council’s executive will on Tuesday consider launching a 100% council tax premium on second homes and premises which have been left empty for a year or more from April 1, 2024.

The move follows last year’s North Yorkshire Rural Commission recommending a charge is levied on second homes and used to finance affordable housing, helping to reverse the ongoing exodus of young families from areas where house prices are many times above average wages.

Two months ago the authority’s leading members postponed a decision on the premium after numerous concerns were raised about whether it would encourage council tax avoidance, for instance by second home owners transferring properties transferring to business rates.

Some opposition councillors have claimed the premium will prove difficult to implement while people who have owned properties in the county for decades say the move will simply make second homes the preserve of the rich.

In a report to the executive, officers forecast more than £14 million a year could be raised from using the levy being introduced by the government in the Levelling Up and Regeneration Bill.

Read more:

Research has shown Richmondshire could generate about £1.8 million through the premium, while the Craven, Harrogate and Ryedale areas could each provide about £1.5 million in extra revenue. Hambleton could provide £1 million and the Selby district a further £260,000.

Addressing the concerns over tax avoidance loopholes, the report states that because council tax rates for second homes mirror those of main residences there may be issues with the classification of properties and the application of a second homes premium “may prompt owners to reclassify properties for genuine reasons”.

The report highlights that properties only need to be available to let for more than 20 weeks in a year to be classed under business rates and that the only detail needed to support such a claim is evidence of an advertisement for let for the property.

From April second homeowners must also prove the property was let for short at least 70 days.

The report states the council would use “mechanisms available” to clamp down on couples who own second homes and falsely claim they are living separately and warns of financial penalties if bogus information is provided.

Officers added while the proportion of second homes in Wales paying the 100 per cent premium had fallen by up to nine per cent since being introduced there in 2017, it is unclear whether the downward trend has been caused by avoidance loopholes or by bringing second homes back into use as housing.

Ahead of the debate, the authority’s Green Party group coordinator, Cllr Andy Brown, who represents Aire Valley, said areas faced “being hollowed out of permanent residents” and there was a strong case for raising the council tax not just on second home owners, but “anyone who rents a property out using short term online letting companies”.

He added it would take skill to design a local property tax to impact on rarely used second homes rather than North Yorkshire’s expansive tourism industry.

793 Harrogate district second-home owners face double council tax charge

About 800 second-home owners in the Harrogate district could be hit by double council tax charges under proposals to tackle the affordable housing crisis.

North Yorkshire County Council has proposed the 100% premium on council tax bills for all second homes in the county from April 2024.

Official figures show there were 793 second homes in Harrogate last year and the county council said these could generate an extra £1.5 million a year to fund services and affordable housing schemes.

Across North Yorkshire, the tax hike could create around £14 million annually, the county council added.

Cllr Carl Les, leader of the county council, described second homes as a “major issue” for areas across the country and said the proposals for North Yorkshire would depend on the government passing legislation in the coming months.

He said: 

“The county is a wonderful place to live and visit, and that has seen the trend towards people wanting to purchase a property either as a second home or a holiday let.

“Any proposed premium on second home owners will be carefully considered and debated by the council before the new legislation is introduced.

“But the revenue generated would prove to be a key source of funding to help to bridge the new council’s budgets and finance vital areas such as homelessness costs and also providing more affordable housing.”

Read more:

The proposal has also been welcomed by councillor Pat Marsh, leader of Harrogate and Knaresborough’s Liberal Democrats, who said holiday hotspots were in danger of “becoming ghost towns” because of second homes.

She said:

“Villages in these desirable areas, in particular, suffer from the viability of not just shops and pubs, but also schools and in some areas the impact is also felt through losses of GPs and other NHS services.

“That is why the Lib Dems welcome the proposal to charge a council tax premium on second homes.

“Residents of these largely rural communities are finding it increasingly difficult to get onto the property ladder because of huge demand for holiday homes pushing up the overall price of property out of their reach.

“In some extreme areas this has created resentment and bitterness as locals cannot afford to buy property in their own communities.”

The number of second homes in Harrogate has increased by more than 13% over the last decade and it has been argued the problem puts a strain on an already limited housing stock at a time when high house prices are driving low-income earners out of the district.

Yet the proposed tax hike has been met with opposition from some politicians who fear it could devalue homes and undermine businesses which depend on second home owners.

There are also concerns it could lead to second home owners transferring their properties to holiday lets to qualify for discounted business rates.

Cllr Stuart Parsons, leader of the Independent group on the county council, described the move as “one of the stupidest suggestions the Tories have ever come up with”.

He told the Local Democracy Reporting Service the proposals would cause more harm than good as there would be “so many loopholes people could dodge out of paying the premium as they wish”.

Other local politicians have also claimed some areas of the county are suffering more due to holiday lets than second homes.

Second homes council tax premium plan gets mixed reception

A plan to tackle the affordable housing crisis in North Yorkshire by doubling the council tax charge on second homes has received a mixed reception.

North Yorkshire County Council has said the proposal to introduce a 100% council tax premium on all second homes in the county from April 2024 will depend on the government passing legislation in the coming months.

The move would double an average band D council tax charge for second home owners to more than £4,100 in some of the most heavily affected areas of the county.

Announcing the proposal, the authority stated it had potential to generate an annual £14m windfall to fund services and affordable housing schemes, funding for which the North Yorkshire Rural Commission identified as a significant challenge. About £1.5m would come from the Harrogate district.

Upper Dales councillor Yvonne Peacock, whose drive to introduce a council tax premium on second homes was rejected by Richmondshire District Council four years ago, said she was “absolutely delighted” by the county council’s proposal.

She said the premium would bring some rarely used second homes on to the market as “people don’t like paying over the odds for anything”, while the funding it would generate would overcome one of the biggest obstacles to building affordable houses.

Read more:

About half of the “windfall” would come from properties in Scarborough district, especially along the coast, and a further large proportion from Richmondshire, which the county council has stated would be shared with all precepting authorities, such as police, rather than ploughed directly back into the most affected areas.

A report to a meeting of the council’s executive, which is considering the proposal on Tuesday, warns that numerous concerns have been raised whether the second homes premium might encourage council tax premium avoidance, with owners transferring properties to holiday lets to qualify for discounted business rates.

Devaluing fears

The proposal has been met with open hostility by some who say it has potential to flood the housing market with properties, devaluing homes and undermining the viability of businesses which depend on second home owners.

County council Independent group leader Councillor Stuart Parsons described the move as “one of the stupidest suggestions the Tories have ever come up with”, adding it would cause more damage than good as there would be “so many loopholes people could dodge out of paying the premium as they wish”.

Restricting the premium to second homes rather than holiday lets would simply lead to the creation of “a multitude of small companies”, he added, to which owners would pay a small nominal fee to themselves to stay at their properties.

Cllr Parsons predicted the authority would see a net loss in council tax as a result and that a levy limited to 100 per cent more council tax would be “pass vaguely unnoticed” by many second homeowners.

Other local politicians have claimed some areas of the county are suffering more due to holiday lets than second homes.

Nevertheless, Councillor John Amsden, chairman of planning in Richmondshire district, said while he welcomed action, the proposed premium would be “a non-starter unless you can pin a property’s ownership down”.

He said:

“It is a step in the right direction, but the problem is now local people cannot afford many of the properties due to a rise in demand, particularly in areas with good broadband connections, after the pandemic.

“Why should we have to suffer depopulation, see our infrastructure like schools and roads dwindle and watch hospitality industry struggle to find staff due to people wanting a second home?”

Harrogate district second home owners face extra council tax charge

North Yorkshire County Council could introduce a 100% premium on council tax bills on second homes within the next two years.

The local authority estimates the charge could generate £1.5m a year in extra council tax payments in the Harrogate district and £14m a year in North Yorkshire overall.

The issue of second homes in the county has risen up the political agenda in recent years, with concerns that they are pricing local people out of buying homes in the places they were brought up.

House prices in the Yorkshire Dales, for instance, are about a third higher than the county average. The average cost of a property in the Dales is nearly £400,000, while the average weekly wage in North Yorkshire is just over £530.

Councillor Carl Les, the Conservative leader of North Yorkshire County Council, said the move depended on new legislation being introduced by the national government and the approval of the local authority.

He said any money raised through the premium would be used to fund council services, including council tax reduction schemes and affordable housing projects.

Read more:

The council’s executive will meet on Tuesday to debate the new council tax policy.

Carl Les

Council leader Carl Les

Cllr Les said:

“The issue of second home ownership has emerged as a major issue for many areas of the country, and it is one that we are acutely aware of in North Yorkshire.

“The county is a wonderful place to live and visit, and that has seen the trend towards people wanting to purchase a property either as a second home or a holiday let.

“Any proposed premium on second home owners will be carefully considered and debated by the council before the new legislation is introduced.

“But the revenue generated would prove to be a key source of funding to help to bridge the new council’s budgets and finance vital areas such as homelessness costs and also providing more affordable housing.”

Both the county council and Harrogate Borough Council will be abolished on April 1 next year and be replaced by a new authority called North Yorkshire Council.

Lack of affordable housing ‘killing’ villages in North Yorkshire

Former Liberal Democrat leader Tim Farron has said second homes and holiday lets are “killing” rural communities in places such as North Yorkshire.

Mr Farron told a debate in Parliament last week that more than a quarter of the housing stock in the Yorkshire Dales was not lived in.

He added the majority of properties in some towns and villages were empty most of the year.

Mr Farron, whose constituency of Westmorland and Lonsdale in Cumbria is severely affected by second homes, called for action to “shift the dial and save the dales and other rural communities”.

He said:

“Excessive second home ownership is a colossal problem in our communities.

“The collapse of affordable, available housing for local communities is killing towns and villages in Cornwall, Northumberland, Shropshire, Devon, Somerset, North Yorkshire, the highlands of Scotland and rural Wales, as well as in my home of Cumbria.

Mr Farron accused the government of “inexcusable inaction to save our communities” and outlines a seven-point action plan.

The measures included making second homes and holiday lets new and separate categories of planning use so councils and national parks could limit the number of them in each town and village, giving councils the power to increase council tax by up to 100% on second homes in the worst-affected communities and ensuring Airbnb properties “meet the same standards as any other rental”.

Read more:

Housing minister Christopher Pincher said rural communities faced “some very specific challenges”, which was why the government had changed the tax system.

“Since 2013, local authorities have been able to levy 100% of council tax on second homes, where the people who own them do not necessarily use the local services that they might, but through the council tax have to contribute to them; 96% of local authorities make use of that opportunity.”

He added changes had been made to stamp duty to help first-time buyers and a surcharge had been introduced for foreign purchasers of property.

Mr Pincher added:

“This issue is also why we have reformed the planning system. It is opaque, slow, and is not predictable. That does not help small and medium-sized enterprises—often the builders who build different types of homes for different tenures in the places that the big builders do not want.

“We need a system that will help those SMEs and is far more engaging.

“We also want, as a reform to be introduced soon, a new infrastructure levy to replace section 106, which tends to favour the bigger developers that can afford the bigger batteries of lawyers.”